Vivendi committed to Telecom Italia, pushes on with Universal Music stake sale

PARIS (Reuters) - Vivendi (VIV.PA) said it has no intention of selling its stake in Telecom Italia (TLIT.MI), despite a bruising battle with an activist fund, and was lining up banks for a possible sale of part of its Universal Music Group division.

FILE PHOTO: A logo is seen over the main entrance of the entertainment-to-telecoms conglomerate Vivendi's headquarters in Paris April 8, 2015. REUTERS/Gonzalo Fuentes/File Photo

The French media group, which announced better-than-expected third quarter sales on Thursday, is in a tussle with activist fund Elliott over the running of Telecom Italia, in which Vivendi owns around 24 percent.

That has prompted market speculation that Vivendi could sell its stake in the Italian company.

“I can tell you that this is completely and utterly wrong,” Vivendi’s chief executive Arnaud de Puyfontaine told analysts.

This week, Telecom Italia sacked Chief Executive Amos Genish while he was away on business in Asia, ousting a man viewed by some directors as an obstacle to their campaign for a more aggressive shake-up at the company.

Genish was appointed last year to run the underperforming former monopoly by Vivendi, but since then directors backed by Elliott have wrested control of the board.

Vivendi had reacted angrily to Genish’s ouster, calling it a mean and cynical manoeuvre by some board members who moved secretly against Genish, convening the board while he was overseas on business.

On Thursday, de Puyfontaine told analysts that Vivendi was a long-term shareholder in Telecom Italia and would remain so.

BANKS LINED UP FOR UMG

Sales rose 5.5 percent in the third quarter from a year ago to 3.38 billion euros